them of the bubble if you would. that's the frustration you're getting from all of us and i am just trying to say what timetable do you believe it but take to evaluate that and give an up or down? >> with respect to the permit? i don't know that there is a specific timetable. >> so it could be what you all -- six months, 12 months -- >> people have absolutely no incentive to slow down the processing of permits. most people doing a permit of louisianan so it's the neighbors whose livelihood are. so i think that giving us adequate resources so that we have the personnel to do it, being a transparent about where permits are in the process, and therefore how long it's taking, i think those are major steps forward plan worried that a legislative solution, and i know the house version of the bill would d may permit application
approved after a certain period of time and that's what i responding to. i think there would be to respect the other question i have is coming from the coal state as you know we have a little bit of everything and the secretary understands that. what we are asking is the development and we are using coal plants for quite some time. i know some people have different opinions of that but it is the most reliable of our caseload fuels. with that being said, the co2, we know the it's there for the carvin captured and storage. what is your opinion, mr. secretary, as far as where you are on the pipeline of co2, the national co2 pipeline could really help enhancement and the look of oil. because we know it's probably one of the best uses we have right now whether it and just storing it as to use it for oil enhancement to make us less dependent on foreign oil. >> we have always been supporters of carbon capture and sequestration, and particularly
using the templates that have already been developed and used for many decades for the recovery. in my own state of colorado frankly we drew wells to extract co2 putting pipe into the oil fields for enhanced recovery, so i think those kind of efforts are a way in which we can move forward to the kind of clean energy technology that we want to have. we support having clean coal technology, and i think that those kind of concept are ones we need. >> but right now they are telling me that we don't have the infrastructure to deliver the co2 to the drilling areas the would really enhance the oil production. and i don't think any private concern is going to be able to do that out of the cause of public-private. are you all looking at that seriously or have you looked at that? >> i have not personally looked at it, but i think it is a
concept that is worthwhile exploring. >> we have their ability to fit to take the strain of carbon off, and if we can do that, they're has to be market for it which there is there has to be delivery. >> we will look at it as a concept worth exploring. >> again, the frustration senator landrieu had is basically we are concerned about dependency on foreign oil, the high price is telling all of us and west virginia. a day doesn't go by i don't have phone calls and letters and is over $4.19 an average in the state this past weekend and something has to be done in order to do that we have to be certain of what we can do in this country and less dependent on the foreign oil holding us hostage so we are asking for your help as much as possible. thank you.
>> senator manchin, i recognize the issue of the day in terms of concern the american public housing and the pain of the pump i think as the president has said we can look back at history from the spikes to start in the late 40's and 70's and 80's and 90's, and there is no quick fix, so there is no quick fix to the high price of gas the global market and the fact we have countries like china using much more loyal and gas than they ever have in the past, so it's important for us to have the long view in mind as we move forward to develop the energy policy of the country and the committee obviously has tremendous expertise for the senators and the staff to help us make sure that we can find those places on which this can be secured. >> it's been going on for quite some time in my lifetime
basically came to him in the 70's in the oil embargo and we learned nothing. we have no energy policy. we are more dependent than ever come and we don't seem to learn from our mistakes and until we have an energy policy it is the energy we can produce that has more certainty and dependability in this nation or the continent. we are going to continue to go down the next 30 or 40 years we hope to break that cycle. >> summit think you for calling the hearing on what is obviously a very hot topic that people feel strongly about. thank you, secretary salazar for being here and for your patience and responding to all of the questions and concerns that we are raising. i actually have a little bit different question i think them the ones i've heard anyway.
as we are looking at legislation to address concerns about permitting and drilling, one concern i have is that we not repeat the mistakes of past. and i know that i was quite surprised and as i think many of us were last year during the bp oil spill to find out the technology is for cleaning up that spell hadn't changed much over the decades preceding, and that while after the exxon valdez spill there was supposedly a process and people put in place to try to address the oil spill that they really had not been effective and that the funding hadn't been there. and my concern is that as we go forward and look at how we improve the process for
permitting and eqecat our drilling in the future that we are able to develop the technology to make sure that if there are deep waters bills that we have technology to clean those up. and i know that the president in his 2012 budget included an increase in funds for the oil spill r&d. but it's not at all clear to me that we have yet in place a process for how we raise those funds on a regular basis and how they are going to be spent and who's going to supervise that so i wonder if you can speak to that and whether you are comfortable that we have in place the process to address oil spill r&d and whether we have more work to do. >> thank you very hatch, senator shaheen, for that question. the fact of the matter is when
one looks back at the exxon valdez the report that came out of to be part of the horizon that the national crisis and environmental catastrophe which caused so much damage is and one that created much change in the country. things continue much the same way without those lessons being learned. the president and his administration are committed to make sure that those same mistakes are not repeated in the way of the deepwater horizon spill and that's why there's been the robustness of the effort to move forward with the creation of the best standards and organizations to oversee in america and to help develop the same kind of calls around the world. in terms of the funding questions and what we are doing with respect to the oil spill response, we do need funding to be hilboldt to have an agency conduct responsibly the important missions that have been assigned to the bureau of
ocean management so they did give additional resources to director bromwich's agency to move in that direction. they are not sufficient frankly. there are more resources needed for the director to be able to hire the kind of personnel that will have the expertise and the control unit to have the ability to do the inspections and oversight that are necessary. we can speak more about this just in the last several weeks he has spent a great deal of time looking at the control centers, the remote data centers that the industry has and all the big companies where they are able to monitor what is happening in the production and the dueling activities of the oil and gas. we need to have our agency move forward to have some of the same capabilities. this will not happen unless the resources are there and it comes back to the question many members of the committee were asking, and that is how can you make sure that we move forward
with permitting in the next business wave a large part of that is that you need to have the personnel on board to be able to do the work >> senator, i share your concerns about their being insufficient advances in the oil spill are in deep. i think we haven't progressed very much in the last 20 years, and the truth is i don't see much going on right now that would improve things. i completely agree with the secretary that we need more governmental levels and in research and development, but we need more private sector and of mud and developing the technology. i think one of the consensus conclusions people have come to as a result of the deepwater horizon is there was insufficient r&d by the private-sector in every area implicated by the deepwater horizon to the r&d and safety, r&d and containment and certainly with respect to the oil spill technology.
it was true then and remains the case today. >> thank you mr. chairman. >> secretary, thank you very much for your generous time. we do have some additional questions the will be submitted for the record, but we appreciate you being here did you have something final you would like to say? go ahead. >> a very quickly through tom hunter we have been working on the energy of eis recommitting which is really doing some great work to ask so many of the questions that were asked here but we also have a proposal in front of the u.s. senate in this committee for the creation of an ocean energy safety institute, and i but like secretary of you would allow mr. chairman to give a quick two-minute summary of what it is we are seeking because it is partially responsible to senator shaheen's question. >> why don't you go ahead. >> i will be quick, mr. chairman. thank you. this is responsive to senator shaheen's question.
the ocean energy safety committee chaired by dr. hunter former chairman of the national lab and populated by folks from academia, other governmental agencies and industry has the task ahead of trying to do a survey of what the r&d is going on in the area of the well control and timid and this bill response, but there is no central place so they can turn to administratively to halt the circuitry in the directors bromwich the and implement the r&d that is needed and also have the regulatory agency keep up to speed on what is going on in terms of advances and all of these areas. that's the genesis of the proposal that we have an ocean energy safety institute that can respond to what secretary chu has also suggested that in order to be a good regulator, our folks at the interior department need to have the same expertise as the top folks in the
industry. having a collaborative institute would meet that goal and helped organize the average. >> again, thank you very much for your time and your testimony. we appreciate it very much and wish you well [inaudible conversations] >> good morning. welcome to the hearings on the oil and gas production and safety and environmental protection there is an essential elements of responsible production. the congress to diligent bipartisan work on these issues, made considerable progress and i am hopeful we will continue today the down that path that
would lead us to effective legislation in this congress. in the last congress we had five hearings on offshore production and issues related to the deepwater horizon disaster. we unanimously reported legislation intended to ensure such accidents would not happen again and move towards a culture of excellence for the agency and the industry. the same legislation is one of the subject is of the hearing today. in this congress, we held a hearing with the co-chairs of the national oil spill commission on their excellent report and the lessons learned from their work. today we will hear testimony on four bills related to domestic wheel and gas that have been referred to the committee. the sponsors of two of the bills are with us today. senator hutchison is here right now, senator landrieu i believe is also a co-sponsor on the bills, senator begich is on his
way edify stand will give his issue when he arrives. i introduced the other two bills. those are s - 16 and s. 917 and i will take just a minute to describe them. they are intended to separately address to aspects of the issue of responsible production based on a bipartisan consensus based work. s - 16, the wheel and gas facilitation act to enhance sufficient inappropriate production domestic production of oil and gas the last two years has been a time of success increasing domestic production and reducing the reliance on imported oil. we are currently the largest producer of natural gas and the third largest producer of coal in the world. the percentage of the alleles that we used it is in port of his declined from 60% in 2008 to
51% in 2009 to 49% in 2010. unfortunately this is not the cure for high gas prices, or we would have seen gas prices declined consistently over the years instead of increasing. but this progress is important for many other reasons and we want to be sure that it continues the provisions of s. - 16 draw from the bill reported by the committee in the congress among other things the bill would provide for a thorough inventory of oil and gas resources of the areas of the outer continental shelf and ensure that permitting process these four allele and gas development or on public land and water are efficient on the agency's. s - 17 the outer continental shelf reform act is light and it looks to be quite difficult to the bill by the committee last year. following the deepwater horizon accident, it would reform the
management of the outer continental shelf in many ways including agency reorganizations, augur planning, safety and environment requirements, enhanced research capacity and a third party oversight increased financial responsibility requirements for industry operators and more efficient enforcement for more effective enforcement. i believe that starting from this consensus vehicle would be helpful in working quickly through the issue this year. this bill will need some updating. senator murkowski and i said considerable time working together to do that. our work will continue and i hope to be able to consider both bills in the committee before memorial day recess. i would note that i've introduced these bills as separate bills for a reason. i want to give our work the best chance being enacted into law. i believe we do that by dealing with these issues in parallel. there is not much disagreement in the senate about the need for
responsible domestic production but there is considerable disagreement about how best to address that issue, and we will work hard to find productive areas in the census. however, ensuring the safety and viability of our operations on the outer continental shelf is a separate matter that deserves attention on its own. the question of how we undertake will and gas development appropriately stands apart from questions of where we undertake those activities. congress should set inappropriate loveless if the environmental compliance regardless of where the oil and gas exploration is occurring in the commitment to response for the offshore operations and protection of citizens and communities is widely shared. the fact that zero allele is no longer a gushing into the gulf as it was last year does not diminish the importance of this work. today's hearing is the next step on the parallel tracks i described and i look forward to hearing the testimony and continuing the efforts.
what we call on senator murkowski for her opening comments. >> thank you mr. chairman, and good morning. today's hearing comes at an opportune time based on the announcement the president made over the weekend. the decision to increase leasing and extend the leases that has been delayed by certainly welcome his attention to michael stich of alaska because we have of course tremendous untapped oil and gas resources. but our problems have not only the related to policing the bit to the permitting side as well so i am hopeful this is just a start and that the administration will quickly issue permits stalled all across the country right now. likewise i believe the work of the committee can simultaneously increase energy production and safety of the operations. i think we all recognize certain events and perhaps certain non-evens and whether that means
removing the provisions for a new bipartisan commission or reacting to the addition the interior department and specifically has been in over its moratorium and its petroleum. we've also seen that the land act really does house and teach with all those actions are under review but as a practical matter the land act obviously provided sufficient authority to implement a moratorium, and even after that to hold off on natural and permits until there was a much greater degree of conflict with safety and spill prevention systems. nels we consider the bills on the oil and gas in an open and transparent committee process, so i will also reiterate my comment from a year ago that the senate should follow the example you sit here. should we pass another bill from our committee it would still be
a work in progress subject to further refinement on the senate floor. but if, like last year, the bill was ultimately attached to a handful of unworkable liability provisions or any other poison pills, my prediction is it will again failed. likewise if it goes to the floor and is close soft to the amendment again my prediction is that there will fail. given some of the findings and the sins of provisions we saw in the bill to raise taxes on the energy companies should be no surprise many of us are weary about what could be tapped on to an otherwise reasonable bill. i emphasize our oil and gas policy requires us to walk and chew gum at the same time. it should be our goal to ensure our offshore industry is working safely, but that requires that there would be working. we are still on the about one third of the bay to the pre-moratorium levels of operation and the e iowa continues to forecast shortfalls
as a result. the prices are hovering near $100 a barrel and importing 50% of supply and headlines over the past few months had been advertising to all of us while a stable domestic oil supply is very important. there should be no doubt and today it seems there is little disagreement that supply really does matter. yet offshore projects in alaska have been delayed a minimum of two additional years. this kind of delay is economically unsustainable and simply unacceptable. i know members on both sides of the committee had similar stories to relate about delay in all sorts of energy projects. i'd like to close by suggesting that we should pass legislation that simultaneously advances safety, production and a fair return of revenue to coastal states. and i mention these priorities in the same sentence because i believe if they can and must depart on the same policy we
need to address them together and if we don't, i am concerned that they will fail to reach the president's desk. i look forward to working with you and the rest of the committee on the policies that will accomplish the goals and i think the witnesses for their testimony this morning. >> thank you very much, senator hutchison and senator begich have joined us to make statements on their bills and we welcome both of you to the committee. why don't you go ahead and give your views and then senator begich. >> thank you mr. reimputed i want to thank you and the ranking member senator murkowski and members of the committee for pushing legislation that will hopefully open up our ability to get our energy resources from our own country to alleviate the high prices of gasoline at the pump right now. thank you for having this hearing. i'm here today to speak on behalf of my bill with senator
landrieu, sent a bill 516. we call it the least act because it extends the leases that have really had the deily of the moratorium while they have maintained their expenses, and senator landrieu and alladi drew up this bill because we know the financial commitments made and how expensive it is. the police act fairly restores the time of loss as a result of the offshore moratorium by expending the impact of leases by one year. so everyone who has had a police approved has gone through all the effort to do that would have their lease extended for the period of the moratorium so that they would be able to come back and continue. the common sense legislation does have bipartisan support. recently president obama stated that his administration is
extending dillinger leases in the areas of the goals that were impacted by the temporary moratorium. i am pleased the president recognizes the energy producers need relief, however, the administration has not said he will make them whole. the president's statement leaves a lot of questions unanswered. which will be extended? that wasn't in a statement at all. how long will the selective leases the extended? senator landrieu and my bill make it very clear answers those questions and leaves no room for confusion. bye passing the legislation we will assure all moratorium impact of leases are extended to read the gulf of mexico was one of the most important regions in the country for exploration and development. it accounts for 30% of the oil produced in america and 13% of the gas produced in our country.
just over year ago the president imposed a sweeping offshore moratorium. when the moratorium was put in place, thousands of pieces sat idle in the gulf while the lessee is continue to pay the expenses and the payroll of their employees. since the moratorium was lifted in october the operators have seen a very slow permit process for approval to go back into exploration. the department of interior has issued 53 shallow water and 14 deepwater permits since last october. the monthly approval rate before the moratorium was approximately ten shallow water and ate deep water every month. this year alone, over 350 offshore leases are due to expire. many of which have had not the opportunity to be developed because of the moratorium. i ever received a letter from
stephen kriseman, president and ceo of the phoenix exploration, a small houston-based exploration company. he wrote the lease act is vital to the phoenix exploration and other small offshore oil and gas companies that were presented by the administration defacto drilling moratorium from fully evaluating many of its gulf of mexico leases acquired and fully paid for the federal competitive bidding process. he says it's very difficult for shallow water independent operators to put together the required business partnerships and track sufficient capital resources needed to develop leases the moratorium is in place and you can't use it but you're still paying for it. so the least active course will give these offshore energy producers and the certainty they need. let me give you another mix sample of how this can impact
the economy. the case of the houston-based seahawk drilling, this is another smaller company that had leases. seahawk used to be the second largest contractor in the united states. they provide high-paying jobs to men and women in texas and across the gulf of mexico. the moratorium in the the delay in the shallow water permitting forced seahawk drilling to declare bankruptcy. this bankruptcy not only destroyed a texas company, it destroyed one dhaka said high-paying jobs. this is one example of the economic devastation the moratorium has caused. the moratorium was a one-size-fits-all shut down. in fact i have to say that even though this bill was in deep water, the shallow water has never been an issue first bill, and jet shallow water was also put under the moratorium.
that is one of the problems we have faced. it was a one-size-fits-all shut down. our legislation, senator landrieu and mine is a one-size-fits-all resolution that says that no one will have to pay for those leases without getting the full term of the lease by having this lease extension. the house passed a version of our bill last week. i hope this committee will insert in our legislation into the bills the will go to the floor so that we can assure the companies that they can get the capitol resources and the partnership to continue the exploration and try to bring down the cost of gasoline at the pump for all of our citizens. thank you. >> senator begich, go ahead. >> thank you ranking member murkowski and i appreciate the opportunity to appear before you talk about the outer continental
shelf permit process information act. the coordinator has been introduced before including s1462 which passed the committee unanimously before. i thought it was a good idea and i wanted to do what i can to evidence the legislation with a few changes. the past year has been evidence that it's needed now more than ever. i was glad to hear the president talked about on saturday the need for coordinating the to the different agencies. i know leader in your next panel secretary salazar will probably speak more of the president's comments on saturday to read as you know shell has been trying to develop its leases since 2005. in addition to julca conocophillips purchase leases and the degree of 2008. six years later, no exploration wells have been drilled due to the delay and litigation. best case scenario for the production is post 2020.
both are perhaps a little sooner. the six federal agencies that govern aspects of the development and administer tin major act of legislation estimates beaufort and the sea alone both 27 billion barrels of oil and nearly 100 or queen natural gas. they're closer to shore and existing infrastructure however the lion's share our fought to be. we have to decide is this a national priority? if it is as i believe it is, we need to get serious about the work ahead of us. the alaska pipeline as it is called caps put through 650,000 barrels a day at this point. between 12 to 13% of domestic production declining at the rate of 67% a year. we will reach a point where it is technically and economically impractical to operate. at that point is that half of
today's production it will be flat and the u.s. will lose 6% of the production and increase the cost access huge alaska resources. there are resources available to slow the decline and sure the best chances are in the offshore. critical to the economy of my state and energy security of this nation we see we can develop this resource responsibly and produce resources for the country's needs. the bill requires the secretary to enter into cooperative arrangements in the federal agencies, the governor of alaska and it doesn't change any impairment of standards just forces the agency is to actually work together. oil and gas industries have grown up in the gulf. industry and government relations evolve along with that all federal agencies exist and work together on alaska they are not necessarily have the resources or the relationships with the experience as described
by senator hutchinson in the gulf. the epa for example are the querist sample. the have minimal resources. the bill would also create coordinators in the atlantic and pacific when and if the sales happen in these reasons, regions. finally, we all recognize these are contentious issues. plenty of light in the family with outside groups, lots of litigation to date and there will be more down the road. litigation prior replaces and speeds the resolution of the differences but doesn't deny access to courts. the kaput of logistics and long lead times easy to see why the season's slip away we have watched the 2010 season, 2011, just disappear from the ability for us to explore. i want to think the committee for allowing the cheering on the
bill and the goal here is to speed up the process but not deny anyone the rights of litigation and the appeal but it the process moving in and more coordinated matter. thank you mr. chairman and ranking member. >> thank you both for your testimony and your leadership with these particular bills and issues. as senator begich indicated i think senator salazar is our -- is also a witness today, and we will have the chance to ask his reaction of some of these items that you are advocating for. thank you all, and we will dismiss you at this point unless some member had a particular question they want to pose. senator landrieu? >> i want to associate myself with the remarks of senator hutchison. i'm proud to co-sponsor the act with her and look forward to getting some details from secretary cells are about the details of the president's proposal.
thank you for your leadership because it's very important even if you open up drilling in areas to have it court made it so the permits can in fact be issued and we know that some of the federal agencies in charge has been under resource and under supported, but i do want to submit to the record to bolster senator hutchison's fine testimony. the actual numbers of permits mr. chairman because it is quite alarming that to date not one single new deep water well permit further drilling in the gulf has been issued. the shallow water is off by 50% and as senator hutchinson says, it wasn't under technically it wasn't under the moratorium, but it found itself under a moratorium, want to submit that for the record and then finally to also said that for the record the billions of dollars that are
outstanding today in bonuses and annual rental payments on leases that are not usable as we speak, and i don't know if people realize how significant the in the numbers are, mr. chairman. but for instance in one of the sales a few years ago, $3.8 billion was paid in bonuses to secure leases that are going unused. the numbers will range from the low of 48 million to the high of 3.8 billion. the annual payments by these -- this industry can go from the low of a few hundred thousand to it looks like 28 to $32 million a year. so there's a tremendous amount of money, mr. chairman, being invested by companies. there is oil and gas in the ground. we need to find a way as soon as
possible to get it out, and i hope both senators will express if not now leader their views on revenue sharing for alaska and for texas and i want to thank them for their testimony and submit those to the record if there is no opposition. >> we are glad to include it in the record. >> think you very much for adding to that. >> it might not be directly what you're talking about but i know the time would be much more involved in the process of getting a permit. do you have any comments on that, a proper period of time, 90 days should the federal government say yay or nay, time to review the process are you getting much prospect saying the time period is so long that its -- >> yes. >> we are talking nine months. estimate would be the timetable, do you have one you would work with your local companies? >> if you know it is to be
basically submitted permit within 30 or 60 days you've got a yes or on notes. the problem is now a not only are you not able to secure permits and i'm hoping senator sell balzar can explain this a little bit later but when you ask how many permits are pending right now commodore not able to get that number because permits are presented and then reject it and we don't know if they are permitting or the rejection pleyel so a lot of this has become less transparent, mr. chairman and i think you for your latitude but the senator from virginia is right to press for what is the real number we are looking for? >> i can't give you a specific number but i would tell you that the years that we have delayed the process is way too long and we recognize the arctic is different territory than the gulf that has a long history, but what's critical for us and i
think the ranking member would echo is companies want certainty, they want to know here is when the time table occurs and the review will occur, the yay or nay or what mitigation fee have to do and then respond. but there is ongoing year after year or some cases bodies and knowing when a decision might be forthcoming because as senator landrieu said we are not sure which playa we are on is the biggest problem. one of the reasons the legislation brought forward is coordinating all the agencies so at least they are talking to each other and maybe we can set some time schedules they have to respond, but right now it is so uncertain that we are talking now for the seasonally activities 2012 cycle because we can't even talk about 2011 because that's kind of over for us the way that works in the arctic. and so we want some certainty, some time schedules, and i think we would be happy to work with the department to figure this out, but right now they submit
and then we just wait and wait and then something kind of comes out and then we say do you need more information because you didn't believe we had it, why didn't you ask that at the beginning? >> the interesting thing to point out is to get the lease, you've already gone through all of the environmental concerns and the safety and you've got in the permit. at least lasts about ten years because there is so much you have to do to explore the whole area to do the seismic testing and see what looks the best, then you have to go to the bottom of the gulf, and that is a hugely expensive process. you are paying people and as senator landrieu pointed out billions of collected amounts and you are doing this over a tenure period and then make a dry well. so we do need the certainty in
the permitting process, but for sure once you have gone through all of the lease requirements and to have been approved you ought to have the full extent of the police so that you can get the return on that investment. that is why seahawks went bankrupt. >> keep in mind, senator manchin, we're talking about alaska to explore. we are not even drilling yet. we can't get to the table to figure out as senator hutchinson described how to map out what we have and we have hundreds of thousands of acres. we can't even get to it because they won't allow us to explore to determine what is there. >> we thank you both for your testimony. >> mr. chairman, could i ask a quick question? >> i'm going to ask the secretary the same question but i want to give you both a chance. why is it taking so long? in your opinion why has it taken so long? what is the fix? what needs to happen and i would
ask the secretary the same thing but i want to give you the chance to address that if he wanted to. >> i can't tell you why it's taking so long, but i do think that there was not enough common sense put into the equation to say shallow water has never been a problem, and if you have a spill in the shallow water, which we haven't, you could clean it up quickly. deepwater was a big issue, putting the shallow water in the effective moratorium has caused jobs, cost the economy and its cost of production that was allowing the prices and gasoline to be lower. so wherever fault the administration the most is putting shallow water over the defacto moratorium because there has never been a problem, and yet we are losing hundreds of
capabilities adding to the amount of gasoline that we have produced because they put shallow water. >> alaska is different because the arctic as the new era of for the development but it's a multi faceted area. one of the pieces of legislation that china was somewhat controversial as the free view. you think about aurelia guess you get sued. you don't even spend the time, you just get sued so you end up going through a whole process that at the end of the day we know it is going to end up in the higher court so what we tried the legislation is streamline and give everyone the right to appeal to get a window of opportunity. 60 days to get the appeal for whatever reason, move forward and that the end of the day, you end up as a district of columbia circuit cord because we think it is a national issue. bypassing some of the process but not be knocking anyone the right to appeal and have their say in court.
in alaska, and i think senator murkowski would agree we have groups that visit alaska that have their view about how alaska should be run and maybe no interest other than the fight in the environmental battle. we also have a lot of, as alaskans we have a lot of concerns to make sure the development is done right. so we have tribal issues, regional issues, but at the end of the day, from the bureaucratic side is this lack of one agency moves forward, does some things, another agency comes along and says we are going to have our own process which may be similar to what we just went through. so that's why the coordination is critical, and how the judicial review is done in a proper way. this kind of the lasting experience, and that helps. >> that's the objective of the legislation. again, not to deny anyone opportunities on either side if they disagree with the decision of an agency to repeal the
process but really have some boxes are rounded and coordination so everyone is talking to everyone rather than with talk through litigation its never get anything done and that's why for years we can't even touch the area to the floor. >> thank you mr. chairman. >> thank you. we appreciate your testimony. >> admiral, it's good to see you again and we welcome you back to the committee. we'll include your statement in the record as if read, but we would like you to make any point you think we particularly need to understand. so go right ahead. >> thank you mr. chairman, great to see you, senator shaheen to really going to focus on a couple issues i think are relevant to my experience and the experience we took part in responding to the deep water oil spill last year and specifically i would like to talk about the
regulation of the offshore drilling units. the drilling systems and the certification regulation some of that was alluded to in the prior testimony. oil spill response plan review. and i would also like this time to talk about the extra doctrinal entities and we had a science team come interagency solutions, we had a technical groups of that relates to what secretary salazar was talking about in terms of bringing intellectual capital and we need to figure out how to institutionalize on the process of the response planning. finally, i included in my statement for the record a couple comments about this bill trust fund liability issues as was stated earlier this is a complex problem boy testified before the science and technology committee almost a year ago today on these issues and i took excerpts from the testimony and included in a statement for the record so do have is a place holder understanding if you put too much in one bill was the senator
said he will have trouble moving in on these significant safety issues moving forward so with that statement i would be glad to go to any questions you might have. >> let me just ask one question obviously on these offshore drilling units, these mobile offshore drilling units, what is the main point there, the lack of requirements that we have for third party review of the key july equipment involved in those come is that the issue? >> yes, sir, what we did the state is a part if i could. first mobile drilling units, the deepwater horizon was registered in the marshall islands. it doesn't touch u.s. sales what was required to be what we would call the jones act. we issue what's called a certificate of compliance, and that means that they are in compliance with u.s. code or
international code or the code of the country is a substantial compliance with international code. there's a certification process that their country has a hearing and international standards. there are two other areas we do the foreign flag vessels in the country and we need to look at both of those in response and in relation to the mobile drilling units. the first on how we treat the cruise ships they carry a large number of the u.s. passengers, they don't report the to go in and out of a single port. they are such a high concern about the safety of life that we inspect vessels being constructed and conduct annual and quarterly exams and call them control verification. i think it is instructive on how we need to deal with the foreign flag offshore mobile drilling units. the second is what we call the port state control programs and these are foreign flag ships carrying commodities, cargo or oil that call on the port in the united states. we developed a matrix based on the performance of the vessel and classification society and the flag that the flight and
beast of the matrix if we think there's an effort to help the offshore and poured them before they come to lecturer they are conforming the international safety standards or its decision is that the african difm entry. we need to look to regimes and how they relate to the certification of mobile offshore drilling units in the country and significantly raise the safety standards of the conversations are going on in the coast guard right now, but my recommendation would be to look a bit too frameworks and apply that to the mobile offshore drilling units, sir. the second issue is on the drilling systems themselves. you talked earlier about api consensus specifications. they are accepted as a way to move the equipment into operation. we are all in agreement with secretary salazar and everybody involved in this bill that an independent third-party technical entity would inspect those against the problems by the person went to legislation you would pass entirely, sir. >> thank you very much, senator
mikulski. estimate it is good to see you. a couple questions for you this morning. first i would like to focus on the issue of disbursement. as you recall about this time last year there was a great deal of back-and-forth about the use of disbursement and what was a safe level the whole issue of we know how it works and better understanding of the surface that when we are making application subsurface it's different and it seemed like there was a lot of just back-and-forth and justice on internal issues with regard to the decisions being made to the disbursement coming from the epa working with the coast guard. the question for you today is kind of knowing where we are in the lessons learned from macondo does the legislation that we
have before us, does this adequately address some of the concerns the were raised in terms of when, where and how to apply disbursement, and is it really good policy to require our deep water operators to provide access to the disbursement. >> yes man and a timely and it relates to senator shaheen's question. the use of the disbursements other than what the impact is and putting them on a national schedule which the oil spill response can use to source those particles are met. that in addition to the fact when we got into this bill that is one of the tools in the toolbox of the rest under a schedule approved by the epa in such large quantities we moved into an area we've never been before. the second was the subsea
application which proved extremely effective mixing the disbursements using the energy of the oil rising to the surface to break it into smaller particles which are biodegradable more quickly. we ventured into areas we've never been before. by extending the regulation that had been issued after the oil spill, the act of 1990 without any significant by my view research being done between now and then. i think we have to, moving forward, given the concerns raised on the disbursement application up the well had put a focus on the interaction of the disbursement of the interaction of disbursements with the oil, implications for toxicity of the water and learn more about what that means. everything we did during the spill response is in conformance of existing law and regulations and therefore nothing was done the was legally wrong but there was so much concern raised that as the incident commander i think it behooves us in the american public to take a good close look at this and if we think where we are at is okay we need to affirm that and we need
more research to take a second look how the chemicals are tested and on schedule we need to do that now. >> let's take this conversation of north into the arctic. it's my understanding that in alaska the use of disbursement hasn't been pre-authorized. is that correct? >> yes, ma'am and i'm going to go on memory because i haven't been on the service a while now. there was a discussion as i was departing the service about the pre-approval locally the way the law is set up disbursements if certain conditions are met and you can have pre-approval to do that if the local team the federal team is working on has been a consensus and approves it. most places the pre-approval exists as the time i would like to comment that pre-approval did not exist alaska and there were objections by the fish and wildlife service on the use of the disbursement. >> it's my understanding it doesn't bring authorize at this point and as we are trying to
advance oil and gas exploration offshore, and we look to the proposals and plans that are out there, i think this is one of those areas we need to know and understand how the disbursement work in the cold waters. this is not a first. norway is as an arctic nation operating successfully offshore for decades and looking to move further north from this other areas. how do we make sure that we have appropriately and adequately done the research and the testing that we need for oil spill clean-up in the event we need it? we don't want to be sitting in -- if something horrible happens we don't want to be sitting in a situation where we are told of from using it will the tool box because we haven't done the background.
>> in relation to the disbursements were made that affirmation and the existing schedule of chemicals including the gulf remains proved nothing has changed and that is the case very public affirmation i think would be in order so we can live on in places like alaska and forming a collective consensus on pre-approval should we need to use that. beyond that it gets back to senator shaheen's call for r&d and it goes well beyond looking up the control and the capping systems. we need to look at the modern technologies. there are new biodegradable agents out there and other things that we need to look at as far as their effectiveness goes up the worst time to do r&d as during an oil spill and we have to lose the thousands of offers requests and suggestions that we couldn't get and bring them to market if you will to apply in this bill at the time. there was an interagency committee of r&d that was set up pursuant to the act of 1990.
is it agreed officer i helped establish that inside the coast guard. the funding details of the first two or three years and you can't do much with a couple hundred thousand dollars a year in the interagency committee and when you move beyond the containment and capping the process related to the drilling systems under the purview of the department of interior the right place to go at this is an interagency committee on r&d with a set of priorities shared by the epa and the other agencies that have a stake in this and then a robust schedule to go out and actually bring the questions to get them research and come up with a public policy decision on how to move forward. >> i would deter you to one of the disappointments following the exxon valdez tragedy. with a lot of lessons learned, and in fact we really haven't made much progress in terms of the technology and the advancement when it comes to clean up in the water from the time of the exxon valdez 20 years ago to what we saw with
macondo, and again it's one of the wake up calls who is doing the research, who was doing all this? we cannot be in a situation where the technology for the cleanup have just kind of been at a standstill while the technology that allow us to produce different places under different conditions, they are allowing us to leapfrog forward, good for us but what also has to leapfrog are the technologies and the advancements that gives us the protection if he will or the assurance that in the event of a disaster we are prepared and i would like to think when it comes to the use of the disbursement or other spill containment measures we are spending the same amount of time and energy to introduce them and keep them current as we are facilitating the technology to
access the resource. >> complete agreement and i would support any legislation. >> thank you. >> senator shaheen. >> thank you. i want to get back to the arlan de questions dennett term schakowsky raised but i want to clarify what i think i heard you say when you were talking about the foreign flag mobile drilling units, do i. i understand from your comments that right now we do not inspect those drilling units? >> we do what included in that is the paperwork that demonstrates the compliance of international standards or substantially in compliance in the code we would use for the u.s. flag vessel it doesn't include in my view the robust inspection we would do under the to what the regime is that i discussed. the regime for tankers and cargo ships and the control verification for the cruise ships i think mobile drilling units have moved into the riskier. and requires a higher level of due diligence to ascertain the compliance of international
standards and that's what i would recommend. >> thank you for the clarification. i want to go back to the r&d question because i think we all now agree that something important to do and we are not doing enough or we don't have the private sector involved. last year following the the oil spill, chairman bingaman, senator udall and i introduced legislation that would set aside 25 million a year from oil and gas royalties to fund the oil spill activities. because one of the issues we discovered as you point out is under the oil pollution act while there was funding several years after the act was passed the funding trailed off pretty dramatically. so, in your experience, is a dedicated funding